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United States v. Leiva

United States District Court, C.D. Illinois, Springfield Division

May 15, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
PAVEL LEIVA, Defendant.

OPINION

RICHARD MILLS, District Judge.

The Indictment in this case alleges a conspiracy to possess and use counterfeit credit cards, in violation of 18 U.S.C. § 1029(a)(1), (3) ("Count One"); and the possession of counterfeit credit cards, in violation of 18 U.S.C. § 1029(a)(3) ("Count Two"). Opening statements are set to begin on May 15, 2014.

Pending before the Court are a number of pre-trial motions.

I. Notice of Intent to Offer and Motion to Exclude Rule 902 Evidence

The Government has filed a Notice of Intent to Offer Evidence pursuant to Rule 902(11) of the Federal Rules of Evidence. See Doc. No. 66. The Government has also filed a Notice of Intent to Offer Evidence pursuant to Rule 902(12) of the Federal Rules of Evidence. See Doc. No. 68. Defendant Pavel Leiva has filed a Motion in Limine to Exclude much of this Evidence. See Doc. No. 72.

Rule 902 lists items of evidence that are self-authenticating and do not require extrinsic evidence of authenticity in order to be admitted. Rule 902(11) pertains to "Certified Domestic Records of a Regularly Conducted Activity" and provides for the admission of:

The original or a copy of a domestic record that meets the requirements of Rule 803(6)(A)-(C), as shown by a certification of the custodian or another qualified person that complies with a federal statute or a rule prescribed by the Supreme Court. Before the trial or hearing, the proponent must give an adverse party reasonable written notice of the intent to offer the record-and must make the record and certification available for inspection-so that the party has a fair opportunity to challenge them.

Fed. R. Evid. 902(11). Rule 902(12) provides for the admission under certain circumstances of "Certified Foreign Records of a Regularly Conducted Activity."

The documents sought to be offered by the Government include a number of business records as evidence of financial transactions. The Defendant does not object to the first five attachments to the Government's First Notice. These include: (1) Document Number 66, Attachment 6 at 8 (showing a transaction on June 26, 2013 in Romeoville, Illinois); (2) Document Number 66, Attachment 7 at 3 (showing a transaction on June 25, 2013 in River Forest, Illinois); and (3) the Attachment at Document Number 68 at pages 12 and 14 showing transactions on June 23, 2013 in Madison and Monona, Wisconsin). These self-authenticating documents involve transactions that occurred during the time and place of the alleged illegal activity: between June 21, 2013 and June 26, 2013, in Illinois and Wisconsin.

The Defendant contends the transactions which occurred outside of Wisconsin and Illinois and at a time other than June of 2013 have nothing to do with this case and should be excluded as irrelevant. Evidence is relevant if "(a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Fed.R.Evid. 401.

The Government contends that the proposed evidence is relevant based on one of the elements it must prove at trial. It must prove that Defendant possessed counterfeit access devices or, as to the conspiracy count, he conspired to possess and use such access devices. The Government claims that during the traffic stop when he was arrested, the Defendant had several credit cards in his possession. The records sought to be admitted are relevant to show that the account numbers on the Defendant's fraudulent cards all belonged to legitimate accounts. Although certain records contain no evidence of illegal transactions, the Government seeks to show that such records are relevant in that they reflect active accounts tied to the account numbers on the alleged fraudulent cards in the Defendant's possession. Thus, legitimate accounts were associated with the cards.

Based on the Government's asserted justification for presenting this evidence, the Court concludes the evidence which is the subject of the Defendant's motion meets the definition of "relevant" as defined in Rule 401.

The Defendant claims that, even if they are relevant, the records should be excluded under Rule 403 of the Federal Rules of Evidence. Rule 403 provides that relevant evidence may be excluded if its probative value is substantially outweighed by a danger of "unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence." The Defendant asserts the introduction of the documents would result in prejudice because the jury may infer that the transactions listed therein were fraudulent transactions that he conducted. Additionally, the documents confuse the issues and might mislead the jury and waste time by referencing transactions that do not pertain to the alleged offense conduct in this case.

The Court is unable to conclude that the probative value of this evidence is substantially outweighed by a danger of unfair prejudice, confusion of the issues or any other basis of exclusion listed in Rule 403. Undoubtedly, there will be a significant amount of testimony and evidence regarding the time period and geographical location of the alleged offenses. Accordingly, the Court concludes it is not likely the jury would infer that documents referring to transactions occurring at a different time and location are part of the alleged offense. Moreover, based on the limited number of records sought to be introduced, the Court does not believe they would result in confusion of the issues, serve to mislead the jury or waste time.

Additionally, the Court will consider an appropriate limiting instruction to the jury if any of these concerns are present upon the introduction of this evidence.

Based on the foregoing, the Defendant's Motion in Limine to Exclude the Government's Rule 902(11) & (12) evidence will be DENIED.

II. Motion in Limine to Exclude Expert Testimony

Pending also is the Defendant's Motion in Limine to Exclude Expert Witness Testimony. See Doc. No. 73. Specifically, the Defendant seeks to exclude the proposed expert testimony of Matthew McWilliams, a Special Agent with the United States Secret Service. The Defendant claims the introduction of this testimony would violate several evidentiary rules. (A)

The Defendant notes the Government proposes to introduce expert testimony from Special Agent McWilliams "about common methods utilized by individuals to obtain credit card numbers without the authorization of the account holder." See Doc. No 67, at 2. The basis of such knowledge apparently comes from "numerous conversations with counterfeiters and access device fraud suspects concerning their methods of operation, to include the acquisition and use of account numbers and re-encoding equipment, in the course of investigative interviews." Id.

The Defendant first alleges this proposed testimony is irrelevant under Rule 401 because the allegations here involve possession and use of counterfeit credit cards, not the manufacture, production or procurement of counterfeit credit cards. The Defendant states he believes the Government's evidence will show that the counterfeit credit cards were mailed to one of the alleged co-conspirators in Wisconsin. Any evidence of how the credit cards were created or how the unknown individual was able to obtain the account numbers is irrelevant to whether or not the Defendant possessed, or conspired to possess and use, counterfeit credit cards. Because the Government did not charge the Defendant with production of counterfeit credit cards, he alleges that any information about how account numbers are obtained is irrelevant and Special Agent McWilliams's proposed testimony should be excluded under Rules 401 and 402.

The Government states that for most of his 16-year career with the Secret Service, Agent McWilliams has been investigating financial crimes involving counterfeit, altered, or fraudulent access devices and/or credit cards. He has degrees in Criminology and Criminal Justice. Agent McWilliams's resume provides that he has received extensive training in investigating violations of federal counterfeiting statutes. Moreover, Agent McWilliams has testified in numerous judicial proceedings regarding fraudulent access device violations.

According to the Government, Agent McWilliams is expected to testify about how credit transactions work, both legitimately and illegitimately. The encoded magnetic strip on the back of the card is what makes legitimate transactions work. Normally, this strip carries the identifying information of the card holder and the account number. A card reader will read that information and telephonically or wirelessly connect to the bank to ensure that the account exists and the proper funds are present, before the transaction is completed. If the magnetic strip is not encoded or is fraudulent, the transaction either will not process (if it's not encoded) or it can show the legitimate account holder's name at the register when the card is swiped.

The Government claims this information is highly relevant in light of how the Defendant and his co-conspirators are alleged to have used fraudulent credit cards. None of the cards had been encoded. The names on the credit cards were fictitious. In order for a transaction to work, therefore, the conspirators had to have the cashier key in the account number listed on the front of the card. The Government states that this may have been a conscious choice of the Defendant in order to avoid having the legitimate account holder's name appear on the register during any transactions. The legitimate account holder's name would have been different than the fictitious name on the front of the card. Alternatively, the conspirators may not have had access to the legitimate account holders' identities to encode the magnetic strip. The Government claims that a limited amount of testimony about how account numbers can be fraudulently obtained in conjunction with how credit card transactions work in general will assist the jury in understanding why the Defendant and his co-conspirators were using the cards in the manner as alleged.

Based on the Government's representations of the proposed testimony and the allegations as to the nature of the alleged scheme, the Court concludes that Agent McWilliams's proposed testimony is relevant pursuant to the scope of Rule 401.

The Defendant further asserts the proposed testimony should be excluded under Rule 403. The testimony would be a waste of time because the jury will not need to know anything about how individuals obtain credit cards in order to determine whether the Defendant possessed and used the credit cards found in the rental car (and/or conspired to do so). Moreover, the Defendant alleges the testimony should be excluded in order to prevent any improper inference by the jury that Defendant was responsible for obtaining the account numbers and producing the counterfeit credit cards. Additionally, this unnecessary evidence is subject to exclusion because it is confusing and potentially misleading.

For the reasons previously discussed, the Court disagrees that the testimony would be a waste of time. The information about how legitimate and illegitimate credit transactions work could be beneficial to the jury. Moreover, because Counsel would have an opportunity to cross-examine the witness and present other evidence, the Court does not believe the jury would improperly infer that Defendant was responsible for obtaining the account numbers and producing the counterfeit credit cards. Accordingly, the Court is unable to conclude that the probative value of the proposed testimony is substantially outweighed by the danger of unfair prejudice or any of the other bases of exclusion noted in Rule 403.

(B)

The Defendant further contends the testimony must be excluded pursuant to Rule 702 of the Federal Rules of Evidence, which provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence ...

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