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United States of America v. Azteca Supply Co.

December 1, 2010


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Before the Court is the Government's motion to admit evidence [43], the Government's Santiago Proffer [44], the Government's consolidated motions in limine [45], and Defendants' preliminary motion in limine [46]. For the reasons set forth below, the Court reserves ruling on the Government's motion to admit evidence [43]; reserves ruling on the admissibility of the co-conspirator statements set out in the Government's Santiago Proffer [44]; grants in part and denies in part the Government's consolidated motions in limine [45]; and grants Defendants' preliminary motion in limine [46].

I. Background

On February 4, 2010, a grand jury returned a six count indictment, charging Defendants Azteca Supply Co., Inc. ("Azteca"), Aurora Venegas, and Thomas Masen with mail fraud in violation of 18 U.S.C. § 1341.*fn1 As charged in the indictment, the Government alleges that Defendants devised and participated in a scheme to defraud the City of Chicago ("the City") and the Village of Orland Park ("the Village") of money and property -- specifically, contracts for minority business enterprises ("MBEs"), women's business enterprises ("WBEs"), and/or disadvantaged business enterprises ("DBEs"), as well as funds paid pursuant to those contracts. Indictment¶ 2. The indictment sets forth the requirements for the pertinent MBE, WBE, and DBE programs, and alleges that Aurora Venegas and Azteca Supply Company falsely represented that they met certain program requirements when in fact they did not. Id. at ¶¶ 1 -6. The indictment further alleges that Thomas Masen used Azteca Supply Company as a "pass-through," meaning that Masen's own company performed work that was supposed to be performed by Azteca Supply Company, and that Azteca Supply Company was not performing the functions required under the MBE, WBE, or DBE programs. Id. at ¶ 7-8.

The indictment describes three separate contracts or subcontracts that were part of the fraudulent scheme. Indictment ¶ 9-21. With respect to the first contract, known as the "O'Hare Contract," the City of Chicago engaged Azteca to provide feminine hygiene disposal systems in the women's bathrooms at O'Hare Airport. According to the indictment, Venegas represented that Azteca "would itself provide 95% of the value of the O'Hare Contract," but in reality "did no significant work" and subcontracted "all significant portions of the work." Aurora Venegas and Azteca Supply Company received approximately $638,000 in payments from the City of Chicago for the "O'Hare Contract." Id. at ¶ 11.

With respect to the second contract, known as the "Main Street Triangle Project," the Village of Orland Park contracted with Company F to construct a new Metra train station. According to the indictment, "Company F agreed to use good faith in hiring MBEs and WBEs that were certified by Metra" and further "agreed that the MBE goal for the Main Street Triangle Project was 10% of the cost of the work, and that the WBE goal for the project was 5% of the cost of the work." Indictment ¶ 1(o). Company F in turn subcontracted with Company C to provide landscaping services for the project. Id. at ¶ 1(p). Company C's subcontract with Company F required it "to provide a minimum of 10% MBE and 5% WBE participation." Id. The indictment further charges that Company C arranged to purchase certain plants from Company D, then representatives from Companies C and D approached Defendant Venegas and asked her "to act as a pass-through for the landscaping subcontract." Id. at ¶ 12. The indictment alleges that Azteca had no role in providing the plants to Company C yet generated documents to make it appear that Azteca had purchased the plants from Company D and supplied them to Company C. Id. at¶ 14. Aurora Venegas and Azteca Supply allegedly received a total of approximately $57,168 in payments from the Main Street Triangle Project. Id. at ¶ 15.

With respect to the third contract, the "O'Hare Runway Subcontract," Azteca supplied reinforced concrete pipe to Company E, which contracted with the City of Chicago to rebuild a runway as part of the O'Hare Modernization Program. Indictment¶¶ 1(q), 16. The City's contract with Company E allegedly required "at least 24% MBE and 4% WBE participation" and "credit would only be given to MBEs and WBEs that performed a commercially useful function." Id. at ¶¶ 1(q), 1(r). Azteca allegedly "provided no useful services to Company E." Id. at¶ 17. Instead, the indictment charges that Company E dealt directly with Company A, the concrete pipe manufacturer that employed Defendant Masen, and Masen allegedly directed Azteca as to how much it should charge Company E for pipe, how much profit Azteca should make, and how much Azteca should pay the trucking company to deliver the pipe to O'Hare. Id. at ¶¶ 17-19. Azteca Supply Company received more than $9,000,000 in payments from the O'Hare Runway Subcontract. Id. at ¶ 21.

II. Legal Standard

A motion in limine is a motion "at the outset" or one made "preliminarily." BLACK'S

LAW DICTIONARY 803 (8th ed. 2004). The power to rule on motions in limine inheres in the Court's role in managing trials. Luce v. United States, 469 U.S. 38, 41 n.4 (1984). Motions in limine may be used to eliminate evidence "that clearly ought not be presented to the jury because [it] clearly would be inadmissible for any purpose." Jonasson v. Lutheran Child & Family Svcs., 115 F.3d 436, 440 (7th Cir. 1997) (observing that, when used properly, the motions may sharpen the issues for trial). The party seeking to exclude evidence has the burden of demonstrating that the evidence would be inadmissible for any purpose. Robenhorst v. Dematic Corp., 2008 WL 1766525, at *2 (N.D. Ill. Apr. 14, 2008).

Because motions in limine are filed before the Court has seen or heard the evidence or observed the trial unfold, rulings in limine may be subject to alteration or reconsideration during the course of trial. United States v. Connelly, 874 F.2d 412, 416 (7th Cir. 1989); see also Luce, 469 U.S. at 41-42 ("Indeed, even if nothing unexpected happens at trial, the district judge is free, in the exercise of sound judicial discretion, to alter a previous in limine ruling."). In addition, if the in limine procedural environment makes it too difficult to evaluate an evidentiary issue, it is appropriate to defer ruling until trial. Jonasson, 115 F.3d at 440 (delaying until trial may afford the judge a better opportunity to estimate the evidence's impact on the jury). Finally, although motions in limine typically address evidentiary matters, they may also relate to other matters, such as affirmative defenses and proper lines of inquiry at trial. See, e.g., United States v. McCloud, 590 F.3d 560, 566-68 (8th Cir. 2009) (affirming trial court's in limine ruling regarding a mistake-of-age defense); United States v. Price, 520 F.3d 753 (7th Cir. 2006) (recounting a case's procedural history).

III. Defendant's Preliminary Motion in Limine

In Defendants' motion in limine, Defendants request that the following three categories of evidence be excluded from the Government's case in chief: (1) evidence of purported "bid rigging" of the O'Hare Contract; (2) evidence related to various political contributions made by Defendants; and (3) evidence related to certain mortgage loans applied for by employees or affiliates of Defendant Azteca Supply Co. Defendants represent, and the Government has not disputed, that counsel for Defendants and the Government have conferred and that the Government indicated that it does not intend to seek the admission of these categories of evidence in its case in chief. Therefore, Defendants' motion in limine is granted.

IV. Government's Motion to Admit Evidence

At trial, the Government intends to present evidence regarding the O'Hare Contract, the Main Street Triangle Project, and the O'Hare Runway Subcontract. The Government also intends to present evidence regarding alleged acts of concealment that Venegas took in order to hide the fraudulent scheme, such as by staging the Azteca warehouse with borrowed merchandise, and pretending to have inventory that did not exist. Additionally, the Government intends to present other evidence to establish that Azteca was not a legitimate MBE, WBE, or DBE, in that it was not operated independently from Thomas Masen and his ...

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