Opinion ID: 3171028
Heading Depth: 3
Heading Rank: 1

Heading: Expert Consultant Funds

Text: Prieto's defense advanced the theory that the straw buyers' misrepresentations on the loan application documents would have been immaterial to lenders' decision-making due to the highly permissive atmosphere that permeated the residential mortgage lending industry during the relevant years. To that end, Prieto sought to hire a mortgage industry specialist who could assist defense counsel as a consultant and potentially testify as an expert witness at trial as to the laxity of loan verification procedures followed by lending institutions in the processing of loan applications. Prieto's request for $10,000 in funding under the Criminal Justice Act (CJA) was denied without prejudice by the district court judge for exceed[ing] the norm for expert services and being inadequately justified, given the absence of - 16 - a clear statement of relevance to any potential defense that might be offered.5 A second request for the funding led to an ex parte hearing with defense counsel at which the court approved $3,000 in funding to hire a mortgage industry specialist as a consultant. See 18 U.S.C. § 3006A(e)(1) (contemplating appropriate inquiry in an ex parte proceeding when services beyond basic legal representation are requested). At the hearing, the district court judge left the door to more funding open, stating that if defense counsel decided to seek additional funding the court would require an extended legal brief outlining the relevance of the testimony and a proffer as to what, exactly, the expert would testify to. Prieto did not use the $3,000 to hire a consultant and did not reapply for more funding. He now argues that the court's requirements for justifying the funding denied him his ability to mount a proper defense and his right to a fair trial. Prieto's entitlement to public funding to employ an expert is, in the first instance, governed by statute. Under the CJA, an indigent criminal defendant may request, from the presiding judge, funding to obtain investigative, expert, or other services necessary for adequate representation. Id. Determining whether a defendant has met that standard is necessarily a context- 5 The fact that Prieto's business garnered large sums of money unlawfully did not mean that it succeeded financially in the face of the market crash. By the time of trial, Prieto was deemed financially eligible for CJA funds. - 17 - dependent and sensitive inquiry. We afford district court and magistrate judges considerable leeway in reaching that decision, United States v. Abreu, 202 F.3d 386, 389 (1st Cir. 2000), and will not reverse a conviction based on the denial or limitation of funding absent a clear and convincing showing that the constraint prejudiced the defendant, United States v. Canessa, 644 F.2d 61, 64 (1st Cir. 1981) (quoting United States v. Eagle, 586 F.2d 1193, 1197 (8th Cir. 1978)). The district court's decision to limit the grant of CJA funding was animated by two distinct concerns, each of them clearly valid given the particular context of this trial. In the ex parte hearing, the district court judge questioned the probative value of the expert's intended testimony on the subject of materiality. The district court also questioned the admissibility of the proffered testimony based on the evidentiary rules governing hearsay and expert testimony. The district court's skepticism about the proposed testimony was well taken. Simply put, the fact that a lender did not verify an applicant's qualifying statements on the application casts little light on whether the lender may have been influenced to deny the application had the applicant told the truth. Indeed, the proposed testimony--to the effect that many lenders undertook no independent due diligence--could well be seen as suggesting that the lender relied on the information supplied by the borrower. - 18 - Whether such skepticism justified a denial of funding we need not decide because the district court provided some funding, and granted Prieto leave to convince it that more funding was needed. Prieto's decision not to use any of the funds, and not to accept the court's invitation to address its skepticism more adequately, provided further cause for that skepticism, and leave him in no position to argue that the district court clearly erred in not finding that additional services of a consulting expert were necessary for [Prieto's] adequate representation. 18 U.S.C. § 3006A(e)(1).6