1 NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 08a0764n.06 F iled: Dec em ber 17, 2008 No. 05-5277 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
UN ITED STA TES , Plaintif f-Appellee , v. DA NI EL G EIG ER , Defendant-

Appellant

. ) ) ) ) ) ) ) ) ) ON AP PE A L FROM THE UN I TE D ST AT ES D I STR I CT CO UR T F OR

TH E E AS TE RN DI STRI CT OF TEN

NESSEE O P I N I O N

BEF OR E: M ER RI TT, M OORE, C OLE, Ci r c uitJudg e s. C OL E, C ir c uit Jud ge. Def endant- Appellant Da

niel Geig er, f

ormer Chief

Ex ecutive Offic er ( “CEO”) o f t h e US A Mining Corpor ation and its holding c orporation, USA Bullion (collec tively , “USA Mining ”), a ppeals his 2004 conviction in the Unite d S t at es District Court for the Eastern District of Tennessee on multipl e counts of t he following fe dera l crimes: (1) w ire fr aud, in violation of 18 U.S.C. § 1343; (2) g raf t, i n v i olation of 18 U.S.C. § 1954; (3) participation in a money -launde ring conspirac y , in violation of 18 U.S.C. § 1656(h) ; and (4) substantive money launder ing, in violation of 18 U.S .C. § 1957. Geig er’ s convictions stem from an a lleg ed sche me by Geig er a nd his co-def

endant Ke nneth Combs to d ef ra u d the bene ficiar ies of the SCT Yar ns, I nc. (“ S C T ”) pension funds. Ove r an a pproxi mately

two-y ear period, Combs alleg edly authorized2

$6,700,000 in loans from the SCT pension funds to USA Mining, whic h Geig er the n diverted ba ck to pe rsonal acc ounts he ld by him a nd Combs. Geig er claims that the district court e rre d in refusing to a llo w two of

his e xpe rt

wi tne sse s to te sti fy

a t tria l, the re by pr oh ibi tin g him fr om pr e se nti nga fu ll

and c omp le te de fe ns e . F or

the fo llo wi ngre a so ns , th is C ourt AF F IRMS the judgme nt of the district

c ourt
. I. BACKG ROUND I n 1 99 6, Com

bs ob ta ine d f

ina nc ia l ba c kin g to p ur c ha se a c on tr oll ingint e re st in SCT, a te xtile manufa cturing business with plants in Tennessee and Washing ton, and in 1998, he assumed control of its employ ee- funded pe nsion funds, which we re g overne d by ERI SA. At that time, Geig er w as
se rv inga s th e CEO and

ma jor ity sh are ho lde r of USA Min ing , wh ic h purc ha se d a c re dit or ’s int e re st in d or mant g old min e s lo c a te d in Mari po sa , Ca lif or nia in 19 95 (t

he “ Ma ri po sa Min e s” ), a

pr op e rt y fo r w hic h G e ig e r w a s th e c ourt -a pp oin te d tr

us te e fo r t he be ne fi t of USA Min ing and oth e r c re dit or s. B e c a us e Ge ig e r’ s 5 00 -p lus Mari po sa Min e s c la ims we re in d isr e pa ir , h e c ou ld n ot a c tiv e ly min e the m for g old , an d he so ug ht an inv e sto r fo r fi na nc ing to al low him to fi x the c la ims and be g in the ex tr act io n proc e ss. I n 1 99 9, a br ok e r i ntr od

uc e d h im t o Co mbs , a

nd the tw o s ub se qu e ntl y
e nte re d in to a Sep te mbe r 199 9 ag re e me nt on b e ha lf of SCT and USAMin ing . U nd e r t

he a g re e me nt, USA Mining re ceive d a $3,500,000 loan from the SCT pension funds to be r epaid f rom proce eds of the Mari po sa

Min e s; i n tu

rn , U SA M ini nga g re e d to re pa y the fu ll amou

nt o f t he loa n w ith in s ix

mon ths , a s w e ll a s p ay

a $1 ,0 00 ,0 00 br ok e ra g e fe e and tr ans fe r $ 31 5, 00 0 in p re pa id a nnua l in te re st to SC T at closing . Geig er e mploy ed attorne y s R.D. Seaton and David L a F aille to revie w the loan

a g re e me nt. Under the g uise of business transa ctions, Geig er an d C o m bs then beg an to use the loa n3

proce eds for

a wide r ang e of pe rsonal expenditures. F rom 1999 throug h 2001, Geig er made a total of $1,750,000 in persona l withdrawa ls f rom USA Mining funds, almost a ll of which we re supplied by the SCT pension funds, which, by this ti me had a

$6,700,000 investment in USA Mining. None of the money

was e ver r epaid, a

nd by the fall of 2001, the SCT pension funds were so depleted that SCT was unable to pay out benef its to exis ting pension-holders. I n eff ect, Geig er stole the pension fu nd s. On Novembe r 13, 2002, following a gover nment investigation, a gra nd jury indicted Geig er, Com b s , and one othe r co- defe ndant for w ire fr aud, g raf t, participation in a money -launde ring

c on sp ir a c y , a

nd su bs tanti ve mon e y la

un de ri ng . F oll ow ingthe ind ic tme nt, Com bs e nte re d a

g uil ty plea, but he c ommitt ed suicide w hile awa iting sente ncing . The Gove rnment then issued two superse ding indictments, droppingthe cha rg es ag ainst Combs but reta ining the e ssential char g es ag ainst Geig er, a

nd on Aug ust 16, 2004, a jury convicted G eig er of

all counts. Ge ig e r f ile d th is t ime ly

a pp e a l, a rguin g that th e dis tr ic t c ourt a bu se d it s d isc re tion whe n it ref used t o allow t wo of his expert witnesses t o testify at hi s trial. The de fense soug ht to call attorney Boyd L emon, an e x pert in leg al ethics, to testify that Geig er’ s transac tional attorney s should have

war ned him about the potential illega lity of his dealing s with Combs and the SCT pension funds and Rob e rt Ga rc ia , a minin g e xpe rt , to opin e on the po te nti a l val ue of the Ma ri po sa Min e s’ g old

de po sit s. Ge ig e r argue s that the dis tr ic t c ourt ’s e xclu sio n o f b oth L e mon ’s and

Ga rc ia ’s te sti mony

vio la te d h is constitutional right to pre sent a full and c omplete def ense at trial. II. AN AL YSI S A. Stand ard of Review This Court has jurisdiction under 28 U.S. C
. § 1291. We reviewa trial c ourt’s evide ntiary4

ruling s for abuse of discr etion. United States v. Gibson , 409 F.3d 325, 337 ( 6th Cir. 2005) (citing Trepel v. Roadway Ex

press, Inc. , 194 F.3d 708, 716 ( 6th Cir. 1 9 9 9 )). I f, howe ver, a trial court’ s evidentiar y ruling s are based on c onclusions of law, we re v iew those leg al conc lusions de novo. Field v. Trigg County Hosp., Inc. , 386 F.3d 729, 735 ( 6th Cir. 2004). We will overturn a c onviction for impro p er ex clus ion of evidenc e only if that omitted evidence , evaluated in the context of the

e nti re re c or d, c re a te s a

re a so na ble do ub t a s to the de fe nd ant’ s g uil t th a t di d n ot o the rw ise e xist. Un ite d S tat es v . B lac k

we ll , 459 F.3d 739, 753 ( 6th Cir. 2006). B. E xpe r t Te st im ony Rul e 70 2 o f t

he F e de ra l Ru le s o f E vid e nc e state s: I f sc ie nti fi c , te c hn ic a l, or oth e r sp e c ia lize d k no wl e dg e wi ll a ssi st t

he tr ie r o f f

a c t to understand the evidenc e or to de termine a fac t in issue, a witnes s q u ali fied a s an e xpe rt by kn ow le dg e , skil l, expe ri e nc e , tra ini ng , o r e du c a tio n, may te sti fy the re to i n the fo rm of a n o pin ion

or oth e rw ise , if

(1 ) t he te sti mony

is b a se d u po n s uf fi c ie nt f a c ts or data , (2) the te stimony is the product of reliable principles and methods, and (3) the witness has a

pplied the principles a

nd methods reliably

to the fac ts of the ca se. Fe d. R. Evid. 702. L ike all evidenc e, the a dmissibi lity of expert testimo n y i s al s o subject to a deter mination of releva

ncy under Rule 401 and balancing of probative value a g ainst likely prejudice under Rule 403. See U

nited States v. LeBlanc , 45 F. App’ x 393, 396 (6th Cir. 2002). Thi s Court employ s a four -par t test to analy

ze the admissibili ty

of expert testimony

under Fe dera l Rules of Evidence 401, 403, and 702. See United States v. Vanc e , 8 71 F .2 d 5 72 , 5 77 (6 th C i r. 1 9 8 9 ) ( ci t i n g United States v. Gre en , 548 F.2d 1261, 1268 ( 6th Cir. 1977)). Admissible expert testimony require s: ( 1) a qualified expert; ( 2) testify ing on a proper subject; (3) in conf ormity to a g e ne ra lly accep ted expl anator y the or y ; ( 4) the pr ob a tiv e va lue of wh ic h o utw e ig hs any

un fa ir prejudicia l effe ct. Id. at 577. B eca use the Gove rnment n either disputes the c rede ntials of L emon5

and Ga rcia as experts in their respe ctive fields nor c halleng es the theor ies upon which they planned to base their r espec tive testimony under Daubert v. Merre ll Dow Phar., Inc. 509 U.S. 579 (1993), the testimony ’s admissibilit y depends on its rele vancy and on whether its probative va lue outweig hs its po te nti a l un fa ir

pr e jud ic ia l e ff

e c t. C. Le m on’ s Ex pe r t T e st im ony I t is e le me nta

ry that a wr on g do e r m ay

no t st eal fro m ano the r a

nd e sc a pe c ri min a l li a

bil ity beca use his lawy er did not tell him that stealing is wr ong . Geig er soug ht to c all L emon to testify that Ge ig e r’ s tr ans a c tio na l a tto rn e y s sh ou ld h a ve wa rn e d h im a

bo ut t he po te nti a l il le g a lity

of h is c on du c t. S p e c i f i c a l l y, G e i g e r

a r g u e s t h a t L e m o n ’ s t e s t i m o n y s h o w s t h a tt h e p e r f o r m an c e o f G e i g e r ’ s a t t o r

n e ys fell below the applicable standard o f ca re . Although he never expressly

raised a n “advic e-of

c ouns e l” de fe ns e a t tr ia l, w e wi ll a ssume that G e ig e r’ s a rgume nts re st o n suc h a def e ns e . Th e pr ima fac ie eleme nts of an advic e-of -counse l defe nse ar e (1) full disclosure of a ll pertinent fac ts and (2) g ood faith re liance on the advice of counse l. United S t a t es v. L indo , 18 F.3d 353, 356 ( 6th Cir. 1 9 9 4 ) ( ci t i n g United States v. Dunc an , 8 5 0 F
. 2 d 1 1 0 4 , 1 1 1 6 ( 6 th Ci r . 1 9 8 8 ) )

. T h u s , to r e ly o nan advice -of- counsel de fense , Geig er would have had t o establish that he fully disclosed all per

tinent fac ts to attorney s Seaton and L a Fa ille a nd that he acte d in good f aith relianc e on their a dvice that his actions wer e not objectionable

. The district cour

t refuse d to admit L emon’s testimony on the g round that it would invade the province of the jury . The c ourt rea soned: As Iun de rs tand

it, wh a t th is w itn e ss is g oin g to d o is to s ta te that th e re are c e rt a in sta nd ard s o f c are that bi nd lawy e rs . T hat is a le g a l matte r, and

that r e qu ir e s h im t o state a le g al conc lusion. And pursuant to the law that the Court has re lied upon, he could not g ive such testimony

.6

Ialso understan d that the witness would g ive an opinion that the per formanc e of cer tain witnesses in cer

tain instances fell below the applicable standard of car e. That is a leg al conc lusion which the rule would a lso prohibi t this witness from g iving. . . . [T]he Court finds that thi s witness is not in a posit ion to give e x pert testimony on the law pur suant to Rule 702. (Tria l Tr., J oint Appendix (“JA”) 307.) Geig er nowargues that rather than ba r L emon’s testimony completely , the di strict court should have at least allowed L emon t o testify as t o the discre te fields of leg al ethics a

nd leg al malpra ctice. T he Gove rnment counte rs that the dis t rict cour t’s ruling

c omp lie s w iththe a

pp lic a ble law a nd tha t r e g ard le ss , whe re Gei ge r f a ile d to me e t hi s b ur de n to establish an advic e-of

-counse l defe nse, L emon’s testimony was irr eleva

nt. I t is well-settled that only the t rial j udg e may instruct a jury as to the law. See U

nited States

v . Zi pk in , 729 F.2d 384, 386- 87 (6th Cir. 1984). B ut our ca se law a lso sug g ests that expert testimony as to leg al conc lusions may b e ap p ro p ri at e in ce rtain limited circ umstances. See B erry v . City of Detroi t , 2 5 F
. 3 d

1 3 4 2 , 1 3 5 3 ( 6 th

Ci r . 1 9 9 4 ) ( im

p li c it ly r e c o g n iz in g th e a d mi s s ib il it y o f e x pert testimony wher e an e x pert’s c rede ntials demonstrated t h at he had specific expertise on a re levant iss ue ); Champion v

. Outlook Nashville, Inc. , 380 F .3 d 893 , 908 (6 th Cir . 200 4) (a llo wi nge xpe rt to te sti fy on a dis c re te are a in wh ic h h e ha d s pe c ia lize d k no wl e dg e ); United States v. Monus , 128 F.3d 376 (6th Cir. 1997) (expert could testify as to w hether defe ndant would be liable f or taxes acc ording to the circ umstances a lleg ed by the Gover

nment); United States v. De Clue , 89 9 F .2 d 1 46 5, 14 73 (6 th Cir. 1990) (allowing witness testimony wher e she “ did not give he r opinion about whethe r appe llant

wa s g uil ty

or no t; s he g a ve he r o pin ion re g ard ingwh e the r t a x wa s d ue and owi ng for th e y e a rs in question in order to a ssist t he jury in determining a fact i n issue”). Thus, we have held that an expert wi tne ss may op ine on a le g a l con c lus ion so lon g a s his tes tim on y wo uld no t det e rm ine an u lti ma te i s s u e b e f o r e t h e j u r

y.7

Geig er’ s counsel attempted to qua li fy L em o n as an expert in the field of leg al ethics, a

nd defe ns e counse l argue s th a t L e mon wo uld have op ine d th a t G e ig e r’ s atto rn e y s w e re e thi c a lly obligated to war

n him t h at his transac tions were pote ntially illega l. An essential ele ment of an advice -of- counsel defense is that the defendant relied i n g ood faith on his attorney ' s advice

. Lindo , 18 F .3 d a t 35 6. L e mon ’s e xpe rt te sti mony re g ard ing the natur e of the a tto rn e y -c lient r elatio ns hip

an d t h e ethi cal duties of G eig er’ s attorney s bore upon Ge ige r’s leg itimate expectations as a client and, as suc h, may

have a ssisted the jury in evaluating his state of mind. Although suc h testimony dir e c tly re la te s to wh e the r G e ig e r’ s atto rn e y s v io lated the ir e thi c a l and

le g a l ob lig a tio ns , b e c a

us e their potential leg al violations were not be fore the jury , we c onclude that the te stimony was prope r under Rule 702. See M

onus , 1 28 F .3 d at 38 6; Dec lue , 899 F.2 d at 1 4 7 3
. T h u s, the district court could have allowed L emon’s te s t i m o n y on the limited issue of the nature of an attorney -client relationship and the duties of Seaton and L a F aille. Re g ard le ss, the dis tr ic t c ourt did no t e rr in e xclu din g L e mon ’s pr of fe re d te sti mony

be c a us e he pr e se nte d n o e vid e nc e tha t G e ig e r m a de a

fu ll d isc los ur e to h is atto rn e y s c on c e rn ing all his d e a li n g s w it

h Co mb s an d

th e SC T p e n s io nf

u n d s . G iv e nth e c o mp le te a b s e n c e o f s u c h e v id e n c e, L emon’s testimony

was irreleva

nt conjec ture about Geig er’ s interac tions with Seaton and L a F aille. This Court addresse d a similar situation in Un ite d S tat es v . B lac k

we ll

. 459 F.3d at 753-54. Ther e, a def endant c onvicted of insider trading was de nied the admission of expert testimony from an economist that inside information often rea ches outsiders throug h “leakag e” r ather than tipping. Id

. On appe al, we he ld that give n the abs e n c e of inde pendent c orrobor ating evidenc e that such “ leaka g e” actua lly occur

red, the district c ourt proper ly excluded the expert’s testimony as irre levant. Id. at 754. As in Blac k

we ll , the re levanc e of L emon’s expert testimony d ep ends on the e x istence of8

corr oborating evidenc e that Geig er made a full disclosure to his attorney s. The recor d is devoid of

an y s u c h e v i d e n c e . L e m o n l a c k e d p e r s o n a l kn o w l e d g e o f w h a t G e i g e r a c tu a l l y s a i d t o h i s a t t o r n e ys and was incompetent to te stify in that reg ard. Se e Blac k

we ll , 459 F.3d at 754 (“While the existence of other sour ces of

tipping sure ly

was re levant to Def

endant’ s ca s e, [ t h e ex pert witness] was not qualifi ed t o t estify

about these sour ces ina smuch as he la cked pe rsonal knowledg e of the m.”). Seaton (Ge ige r’s only

attorney t o t ak e t he stand) te stified only that Geig er ma de the $315,000 interest pre pay

ment direc tly

to SC T rathe r than to the pension funds, and that he had told Geig er that the loan see med prope r fr om a contra ct perspe ctive. Fur ther, g iven hea

rsay limit ations, evidenc e of full disclosure could only have come from Geig er himself, and Geige r di d not testify

. See U nited Sta te s v . H atc he tt , 918 F.2d 631, 658 n.8 ( 6th Cir. 1990) (upholding district c ourt’s ex clusion of

a tto rn e y ’s te sti mony

a bo ut t a x advic e he g a ve to d e fe nd ant w he re , g ive n d e fe nd ant’ s o wn re fu sa l to testify , the jury

would have be en induce d to acc ept the truth of the matters di sclosed by the attorne y

). There fore , though L emon’s testimony was potentially admissible under Rule 702, the district court did not abuse its discretion in excluding it as irre levant under Rule 401. D. Gar cia’s Expert Te stim ony Geig er also argues t hat t he district cour t abused its discretion whe n it ex cluded the te stimony

o f G ar ci a. T h e d ef

en s e hi re d Ga rc i a t o i n v es t i gat e a n d

an al y z e t h e M ar i p o s a M i n es i n2 0 0 3 t o as s i gn
a do lla r v a lue to th e proje c t and la te r c a lle d h im t o te sti fy that th e min e s h a d c on sid e ra ble g old deposits in an eff

ort t o establish that USA Mining wa s not completely insolvent. Garc ia was pr e pa re d to of fe r h is e sti ma te that th e Ma ri po sa Min e s c on ta ine d a pp ro xima te ly

$6 30 ,0 00 ,0 00 in g old , b ut t he dis tr ic t c ourt

e xclu de d h is t e sti mony , expla ini ng that the “ g old c on te nt” fi g ur e wa s b oth potentially

misleading to the jury

beca use it did not account for the cost of extraction and irr eleva nt9

as to Geig er’ s intent in carr y ing out the a lleg ed sche me with Combs. Geig er a sserts that Gar cia’ s valuation testimony makes the e x istence of

fra ud less likely

by showing that Geig er ha d valuable a ssets that he could stake ag ainst the amounts he borr owed f rom the SCT pension f

unds. Howeve r, beca

use we f ind that Garc ia’s testimony does not bea

r on Ge ige r’s
overa ll scheme, its exclusion was not an abuse of di scre tion by the district court. See U nited States v. W ebster , 125 F.3d 1024, 1032- 34 (7th Cir. 1997) (de eming proper the district court’s e x clusion of evide nce of

value of defe ndant’s prope rty

wher e the valuation was unrelated to de fenda nt’s intent reg ardingthe cr ime at issue). IV . C ON CL USI ON F o r t h e s e r e a s o n s , t h i s Cou rt AFFI RMS the judg ment of the district cour t and upholds Geig er’ s conviction.