Opinion ID: 2774634
Heading Depth: 2
Heading Rank: 2

Heading: Ponzi Scheme and Lulling Payments

Text: We now address the Ponzi-scheme and lulling-payments testimony. Regarding the former, Plato asserts that Sabban was allowed “to give an opinion that he observed that Mr. Plato was conducting a Ponzi scheme.” Plato 29 666 F.2d 261, 270 (5th Cir. 1982). 30 Id. 31 Id. at 269. 17 Case: 13-20222 Document: 00512919459 Page: 18 Date Filed: 01/29/2015 No. 13-20222 takes the position that a witness may describe the characteristics of a Ponzi scheme, but that a witness “crosses the line when he is allowed to testify that the defendant on trial was running a Ponzi scheme.” Plato argues that, once over the line, Sabban’s testimony was speaking to Plato’s intent, in violation of Federal Rule of Evidence 704(b)’s prohibition of opinion testimony regarding a defendant’s intent. The Government counters that Sabban’s testimony was of the former type and did not cross the line, characterizing the testimony as merely addressing the definition of a Ponzi scheme and whether Sabban’s analysis of MPC’s payments and expenses had characteristics of a Ponzi scheme. Regarding lulling payments, Plato similarly charges that Sabban opined on Plato’s making lulling payments to investors, such that it implicated Plato’s intent, and the Government similarly argues that Sabban’s testimony was limited to factual characterizations of payments. In the first instance, we conclude that the Government’s characterization is more consistent with the trial record, such that the admission did not constitute error. While Sabban’s testimony approached the point of stating that Plato was conducting a Ponzi scheme or making lulling payments, Sabban refrained from direct attribution to Plato. Indeed, as the Government points out, the district court sustained Plato’s objection to a more direct attribution, when the Government questioned whether Sabban found “characteristics of a Ponzi scheme in the records concerning MPC.” Furthermore, at least regarding the Ponzi-scheme testimony, Plato was not prejudiced by any error since Wagner later testified to the practice of paying old investors with new-investor money, testimony which provided sufficient evidence for a reasonable jury to infer Ponzi-scheme characteristics. Prejudice from the admission of both instances of testimony was further 18 Case: 13-20222 Document: 00512919459 Page: 19 Date Filed: 01/29/2015 No. 13-20222 prevented through Sabban’s cross-examination by Plato’s counsel. We find no error in the admission of Sabban’s complained-of testimony and, even presuming error, find any such error harmless.