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United States v. Vilar

September 4, 2008


The opinion of the court was delivered by: Richard J. Sullivan, District Judge


Defendants Alberto William Vilar ("Vilar") and Gary Alan Tanaka ("Tanaka") have moved to exclude certain evidence of "other acts" or allegedly inextricably intertwined conduct that the Government intends to introduce in its case-in-chief at trial in this matter, which is now scheduled for September 22, 2008. For the following reasons, Defendants' motions are denied in part, and decision on the remaining portions is deferred.


The Court presumes the parties' familiarity with the facts and procedural history of this action, and, therefore, recites only those facts necessary to resolve the instant motion. In addition, in the "Discussion" section of this Memorandum and Order, the Court recites certain additional facts relevant to specific portions of this opinion.

The charges in the Superseding Indictment stem from Defendants' alleged involvement in a conspiracy, spanning nineteen years, to defraud investors whom Amerindo advised. Among other things, the Government intends to introduce evidence to show that Defendants persuaded their victims, including Lily Cates ("Cates"), to invest in a variety of investment instruments, including the Amerindo SBIC Investment Fund LP ("SBIC" Investment) and the Guaranteed Fixed Rate Deposit Account Program ("GFRDA" Investment). The Government alleges that, rather than investing the money as promised, Defendants instead diverted the funds to their own use, and made numerous misrepresentations to the victims to conceal their fraud.

In order to prove the charges alleged, the Government intends to introduce evidence to show that in 2003, as part of the conspiracy, Defendants fraudulently transferred funds from Cates's account at Bear Stearns (the "Cates Account") into another Amerindo-controlled Bear Stearns account (the "2003 Transfer"); the Government alleges that those funds were later transferred to an account controlled by Defendant Vilar.

The Government, in its July 9, 2008 notice of evidence of extrinsic acts (the "Notice"), expressed its intention to introduce, as direct evidence of the conspiracy, evidence pertaining to an alleged 2004 fraudulent transfer from the Cates account to an Amerindo-controlled account (the "2004 Transfer"), as well as evidence pertaining to another investment Cates made in an investment vehicle called Rhodes Capital Group, Ltd. (the "Rhodes Capital Investment"). (Notice at 1-2.) In addition, the Government gave notice of its intention to introduce evidence of certain misstatements allegedly made by Defendant Vilar to the IRS (the "IRS Statements"). (Notice at 3-4.) Defendants move to exclude the proffered evidence, and the Government now seeks an in limine order admitting the other acts evidence, arguing that evidence of the 2004 Transaction and the Rhodes Capital Investment is admissible as these events are inextricably intertwined with the charged crimes. (Gov't Mem. at 9, 14-15.) The Government also urges that the 2004 Transaction, the Rhodes Capital Investment, and the IRS Statements be deemed admissible under Rule 404(b) as evidence of the Defendants' relationship of trust, to rebut any defense by either Defendant that the other Defendant acted on his own, and as evidence of Defendants' knowledge, intent, or absence of mistake with respect to the conduct charged in the indictment. (Gov't Mem. at 11-19.)

Defendants move to exclude the evidence of the 2004 Transfer, the Rhodes Capital Investment, and the IRS Statements on several grounds. Defendants argue that this evidence is not inextricably intertwined with the charged conduct and is inadmissible under Rule 404(b) as well as unfairly prejudicial under Rule 403 of the Federal Rules of Evidence.*fn1 Defendant Tanaka further asks that, should this Court find the IRS Statements to be admissible, the jury be given a limiting instruction directing it to consider the IRS Statements only against Defendant Vilar.


A. Legal Standard

The Second Circuit has repeatedly held that "'evidence of uncharged criminal activity is not considered other crimes evidence under Fed. R. Evid. 404(b) if it arose out of the same transaction or series of transactions as the charged offense, if it is inextricably intertwined with the evidence regarding the charged offense, or if it is necessary to complete the story of the crime on trial.'" United States v. Carboni, 204 F.3d 39, 44 (2d Cir. 2000) (quoting United States v. Gonzalez, 110 F.3d 936, 942 (2d Cir. 1997)); see also United States v. Towne, 870 F.2d 880, 886 (2d Cir. 1989). In such circumstances, the evidence of uncharged conduct is appropriately treated as "'part of the very act charged,' or, at least, proof of that act." United States v. Quinones, 511 F.3d 289, 309 (2d Cir. 2007) (quoting United States v. Concepcion, 983 F.2d 369, 392 (2d Cir. 1992)). Evidence that is inextricably intertwined with charged conduct must nonetheless satisfy the balancing test set forth in Federal Rule of Evidence 403. See United States v. Graziano, 558 F. Supp. 2d 304, 320 (E.D.N.Y. 2008) (applying Rule 403's balancing test to evidence deemed inextricably intertwined).

Even if not relevant as intrinsic evidence, evidence of other acts may be admissible pursuant to Rule 404(b) of the Federal Rules of Evidence. Although Rule 404(b) provides generally that "[e]vidence of other crimes, wrongs or acts is not admissible to prove the character of a person in order to show action in conformity therewith," such evidence " may . . . be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan knowledge, identity, or absence of mistake or accident." Fed.R.Evid. 404(b). The Second Circuit has adopted an "inclusionary" approach to Rule 404(b) evidence, "allowing the admission of such evidence for any purpose other than to show a defendant's criminal propensity, as long as the evidence is relevant and satisfies the probative-prejudice balancing test" of Rule 403. United States v. Inserra, 34 F.3d 83, 89 (2d Cir. 1994). Should evidence be deemed admissible under Rule 404(b), "upon request, the district court must give an appropriate limiting instruction to the jury." United States v. Pitre,960 F.2d 1112, 1119(2d Cir. 1992).

B. Analysis

1. The 2004 ...

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