242 F. Supp. 3d 109
D. Conn.2017Background
- Defendants Brett Lillemoe and Pablo Calderon were convicted (Nov. 2016) of conspiracy and wire fraud based on transactions that used the USDA GSM-102 export credit guarantee program; a co‑defendant, Sarah Zirbes, was acquitted.
- The charged scheme involved purchasing or obtaining bills of lading marked “Copy — Non‑Negotiable,” altering them (whiting out the marking, stamping “Original,” changing dates/shading), and presenting them to U.S. banks (CoBank and Deutsche Bank) to obtain payment under letters of credit tied to GSM‑102 guarantees.
- Government evidence included GSM‑102 file materials, unaltered original bills of lading, bank witness testimony (CoBank and Deutsche Bank), USDA and FBI testimony, and a rebuttal letters‑of‑credit expert; defendants presented industry and document experts and defendant testimony.
- The jury found guilt on Counts related to a specific transaction (the “Cool Express” transaction involving a Russian issuing bank, IIB) and acquitted other counts; defendants moved under Fed. R. Crim. P. 29 (judgment of acquittal) or in the alternative Rule 33 (new trial).
- The court reviewed sufficiency of the evidence for wire fraud and conspiracy, and also denied a request for a new trial premised on exclusion under Fed. R. Evid. 403 of 2014 revisions to GSM‑102 regulations (which postdated the charged conduct).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for wire fraud (material misrepresentation; deprivation of information) | Government: alterations deprived banks of information necessary to decide whether presentations were complying and to control disposition of funds | Defendants: banks had no discretion at presentation (UCP rules require honoring facially complying documents); alterations therefore could not have affected banks’ economic decision | Court: Evidence sufficient — banks could refuse non‑complying presentations; testimony supported that altered bills were material and deprived banks of decision‑making information; Rule 29 denied |
| Alleged lack of risk/harm to banks | Government: altered documents exposed banks to risk (loss, litigation, denial of CCC guarantee) even if ultimate repayment might occur | Defendants: banks received expected guarantee and fees (no ultimate harm); indemnity/regulatory clauses protect assignees | Court: Risk to bank’s bargain and potential litigation over knowledge of fraud sufficed; deprivation of right to control assets theory applies; defendants’ argument rejected |
| Materiality of document alterations | Government: misstatements had natural tendency to influence banks’ decision to release funds | Defendants: industry practice and some testimony showed non‑negotiable copies were accepted; expert conflict undermines materiality | Court: Credibility and conflicts for jury; abundant testimony (bank witnesses, experts, defendants’ emails) supported materiality; verdict stands |
| Exclusion of 2014 GSM‑102 regulation revisions (new trial claim) | Defendants: 2014 rules evidence would show industry practice and support innocence; exclusion prejudicial | Government: changes postdate charged conduct; probative value low and cumulative | Court: Exclusion under Rule 403 proper — risk of jury confusion and cumulative value outweighed probative value; new trial denied |
Key Cases Cited
- Jackson v. Virginia, 443 U.S. 307 (standard for sufficiency review)
- Mi Sun Cho v. United States, 713 F.3d 716 (defendant bears heavy burden on Rule 29 sufficiency challenge)
- United States v. Hawkins, 547 F.3d 66 (defer to jury credibility findings on sufficiency)
- United States v. Cassese, 428 F.3d 92 (court must not substitute its view of evidence for jury’s)
- United States v. Triumph Capital Group, Inc., 544 F.3d 149 (Rule 33 new‑trial standard — sparingly granted)
- Neder v. United States, 527 U.S. 1 (definition of materiality)
- United States v. Binday, 804 F.3d 558 (misrepresentations altering essential risks of agreement)
- United States v. DiNome, 86 F.3d 277 (right‑to‑control theory of wire fraud)
- United States v. Best, 219 F.3d 192 (jury may resolve conflicting expert testimony)